Anytime you hear about a coin getting hacked or thousands of coins disappearing, it inevitably is because the exchange was breached. Since the blockchain is so hard to hack and exchanges are found on traditional central servers, it has become an easy target.

Bitshares is the first exchange to set itself up on the blockchain becoming a truly trustless and decentralized exchange.

The reason exchanges are not usually on a blockchain is because the verifying of blocks is painfully slow. This is especially true when talking about big Proof of Work chains like Bitcoin. Taking hours to validate a transaction could mean missing out on a hot coin as the value is rising.

BitShares is a peer to peer distributed ledger. It works with a Delegated Proof of Stake protocol. By voting for delegates or Witnesses, the validation process is streamlined.

By using the Delegated Proof of Stake (DPoS), transactions can be done quickly. Though it has yet to be tested, in theory BitShares can handle 100,000 transactions per second compared to Bitcoin’s 5 per second.

The native token, BTS, needs to be bought to act as collateral on the exchange. So, even if you are not planning to invest in BTS you need to buy some to buy whatever token you are interested in. The result is that the coin is more about using for equity than it is for use as an altcoin you would want to hold.

There are a couple of other benefits to using Bitshares as an exchange besides the trustless nature of it.

For one, you can put up any kind of asset. These assets can be used to exchange for fiat or crypto currency and since you aren’t trying to sell them can give you nearly instant access to funds. Those funds can be used to trade for other currencies on the Bitshares exchange or withdrawn.

The other benefit is the use of Smartcoins. Smartcoins are tied to fiat currencies that don’t fluctuate. For instance, the bitUSD will always equal one US dollar. Whatever the dollar is worth is what the bitUSD will be worth.

Buying Smartcoins and holding them while you wait for a dip in the market is a great way to take part in trading on an exchange without worrying about the volatility of a coin.

The last thing that sets Bishares apart from traditional exchanges is the community aspect and the democratization of it.

Delegates that have stake, ie own coins, can vote to approve or disapprove projects and decide for themselves what direction the platform should move in without a central authority involved in making decisions. Even the employees of the company have a stake in the future of it as they can propose projects and then the tokens are used to fund those projects.

The beauty of this project is the true decentralized nature of it. They didn’t just set out to create a trustless exchange, they also want to build a vision of what the blockchain can achieve by taking control away from authorities and putting it back in the hands of the people using these services.